Finance & Fury Podcast

Welcome to Finance and Fury, I’m Louis. Today, I want to talk about overcoming fears and focusing on your purpose and making a plan to become self-reliant – fears of the virus, or government responses and losing jobs - and instead focusing on what can get you through hard times – purpose and relationships – focusing on the positives   There is a lot of fear going around – it a massive distraction and disruption to almost everyone’s lives – People are losing jobs – losing an income and being out of work is very stressful Governments are taking more control – population is becoming reliant on governments Central banks taking further control over financial markets – QE, money printing and funding the government deficit spending General panic hoarding goods and people turning on their fellow humans – as they are competition or a threat of getting them infected   The constant reporting creates worry – either getting the disease, losing your livelihood, or having to fight others for the precious resource of TP –

Welcome to Finance and Fury, the Furious Friday edition. Always told to listen to the experts – argument by authority – The experts know what is best for you – Also – the higher authority in your life – the government – knows what is best for you Now - You aren’t allowed to gather at home with more than 10 people – have to socially distance in public or face a $1,000 fine – due to a central power telling you so Interesting thing with experts and higher authorities – we only ever hear from one side – the side that works in with the Governments narrative   Today – want to share What are other experts saying? We have to believe all experts after all - There are plenty of Other experts – who have differing opinions Dr Joel Kettner- former Chief Public Health Officer for Manitoba province (Canada between Saskatchewan and Ontario) and Medical Director of the International Centre for Infectious Diseases – must be worried right? What he says: I have never seen anything like this, anything anywhere near like th

Welcome to Finance and Fury, the Say What Wednesday edition. This week, two questions – both from John’s about banking system security  -   First John: I know you’ve spoken about this before, but would be interested to hear about if you think there could be liquidity problems with our banks here in Aus, ie a run on the banks like we have seen on TP etc and in Scotland etc during the GFC. Is our money safe in the banks, or in my case offset accounts with non bank lenders?    Second John:  Just a question I’m relation to bank savings. Do you think our savings ‘Australians’ is at risk of being confiscated if some banks were to collapse? I am aware there are Government Guarantees of up to $250k. But with huge stimulus packages in place and potential many more, would it be possible they wouldn’t be able to guarantee this?     Great questions – Run through –   Liquidity problems – bank runs –   Are your funds in banks safe? Offset accounts - Will the guarantees kick in?     Go into ma

Welcome to Finance and Fury – Last year through September, October and November – was running through the future of the economy – was looking at this through a few episodes – interesting to see a lot of what was discussed playing out now In those episodes – went through a Big disclaimer - transformational markets are something that cannot be 100% predicted – no way to know where it will end up But did look at possible outcomes proposed based upon what the economists and monetary officials were saying – they are who influence policy decisions after all- are recommending to implement What we went through is a new evolutionary phase of the monetary system - combining QE, government deficit spending, and ‘helicopter money’ - the nuclear fusion of monetary and fiscal policies – aimed to be the life line to the economy – regardless of the economies economic output – Also went through what would be needed to implement this – basics economic behind the policies – e.g. trying to stimulate inflation and avoid defl

Welcome to Finance and Fury, The Furious Friday edition You probably are exhausted about the coronavirus - What you probably haven’t heard about is A little known type of bond created in 2017 by the World Bank. The World Bank – Headquartered in Washington DC – back in June 2017 – issued Pandemic Emergency Financing Facility (PEF) – call them pandemic bonds Technically their debt/lending arm – the International Bank for Reconstruction and Development Facility created by the World Bank to channel surge funding to developing countries facing the risk of a pandemic Is an international organisation created in 1944 – part of the Brenton woods era of creation of agencies The World Bank has two main goals: to end extreme poverty and promote shared prosperity – does this primarily by providing loans to its borrowing member government clients in middle-income countries Loans in the form of bonds – done so through the international capital markets for 70 years to fund its activities 2017 – the World Bank issued $

Welcome to Finance and Fury, The Say What Wednesday edition This week the question from Jayden – Are CBA and other bank shares a good investment for dividends at the moment? Based around current price and un-updated yields – Based around prices and assuming dividends will continue to be the same – might say yes – end of the episode – thanks for listening – but wait - is there something else going on? Start with Some Banks are close to their post GFC prices – ex CBA – does this mean they are a good time to buy? Few things happening – The Council of Financial Regulation - (the Council) is the coordinating body for Australia's main financial regulatory agencies. There are four members: the Australian Prudential Regulation Authority (APRA), the Australian Securities and Investments Commission (ASIC), the Australian Treasury and the Reserve Bank of Australia (RBA) RBA – Governor chairs the Council and the RBA provides secretariat support. It is a non-statutory body, without regulatory or policy decision-making p

Welcome to Finance and Fury – Focus on what you can control Australia has been cancelled – IMO - The largest overreaction in history – the world of medical martial law Working from home, no public gatherings, not even meant to shake hands - Panic is the disease – The panic is creating the real world effects – shortages, people potentially losing jobs, share market crashing – The fear of the virus is having the real world events – cancelling ANZAC day Can't change anything about the virus and there are so many stories going around – bioweapon, most deadly disease ever, 5G creating this – who knows what to believe – doesn’t matter – all of these stories serve the same function – of creating fear by putting this outside of your control What is another name for a story? A Novel – In this case – the Novel Coronavirus – Definition of novel – noun: an invented prose narrative that is usually long and complex and deals especially with human experience through a usually connected sequence of events Coronavirus - any

Welcome to Finance and Fury, The Furious Friday edition What has created a system where the share market can go down so quickly? The perfect storm – Panic, OPEC agreement breaking down – computer algorithms kicking in, mass sell-offs of index funds The recent collapse in the stock market – speculation is rampart with discussion of a new crash looming on the horizon – even with Monday’s record breaking drop – market into retreat Important context – that a chain reaction collapse was only kept at bay due to massive liquidity injections by the Federal Reserve’s overnight repo loans should not be ignored Began in September 2019 - has grown to over $100 billion per night… all that to support the largest financial bubble in human history with global derivatives estimated at $1.2 quadrillion – or 20 times the global GDP Thanks to media – and not to be offensive – but general financially illiteracy – the underlying reasons as to why the economic system is so fragile and crash has been misdiagnosed as the coronavi

Welcome to Finance and Fury, The Say What Wednesday Edition Question from one of my friends – What is happening to oil prices? Is it a time to buy oil linked companies due to large losses? Over the past few days the price of oil has plummeted On Monday - the Brent has dropped as much as 31% to just $33 one of the most dramatic bouts of selling ever and is the biggest one-day drop in Brent on record Goldman's shocking price target cut, which now expected Brent dropping into the $20s What is going on - Oil pricing war between Russia and Saudi Arabia – See different headlines – Putin Launches "War On US Shale" After Dumping Mohammed bin Salman & Breaking Up OPEC+ Saudi Arabia Starts All-Out Oil War: MbS Destroys OPEC By Flooding Market, Slashing Oil Prices Truth is somewhere in the middle – OPEC and Russia oil price war – with the US industry as potential targets   Important first step when looking at oil price OPEC - The Organisation of the Petroleum Exporting Countries - intergovernmental organisat

Welcome to Finance and Fury Today – Talk about a Money Illusion and the GSR  Gold has been on a rally – but silver hasn’t gone up by as much The Gold-to-Silver Ratio: What is It and Why Does It Matter? For experienced investors, the gold-to-silver ratio is one of many indicators used to determine the right (and wrong) time to buy or sell their precious metals. The gold/silver ratio is simply the amount of silver it takes to purchase one ounce of gold. If the ratio is 25 to 1, that means, at the current price, you could use 25 ounces of silver to buy one ounce of gold. 25 to 1 would be considered a narrow ratio Other factors – including economic uncertainty, inflation frenzy and debt – have encouraged millions to invest in gold and silver, and in the past few years, small-scale investors have begun to climb aboard. Yet despite these market developments, to many, the gold-to-silver ratio remains a vague, elusive mystery. Currently – GSR ratio is around 96.5 times - $26 for Silver and $2,718 for Gold Buy 96

Welcome to Finance and Fury, the Furious Friday Edition Today is a follow on from Last FF ep – on K waves – if haven’t listened – worthwhile to go check Today – is the cycle relevant today with central banks – and go through the most recent cycle – meant to start in 1949 and end this year First - Summary from last week – K-wave – summarises the long term cycles of economies in capitalist countries - Each cycle has it sub-cycles – which are dubbed as seasons as broken down into four sub-cycles – Each K wave is a 60 year cycle (+/- a few years here or there) – then the internal phases that are characterized as seasons: spring, summer, autumn, and winter: Spring: Increase in productivity, along with inflation, signifying an economic boom Summer: Increase in the general affluence level leads to changing attitudes toward work that results in a deceleration of economic growth Autumn: Stagnating economic conditions give rise to a deflationary growth spiral that gives rise to isolationist policies, further curtailin

Welcome to Finance and Fury, The Saw What Wednesday Edition – Question from Jack This is going to be a bit of a Q&A style episode – he did a lot of research and sent it through – making my job easy on this one – so thank you for that Jacks Question - I wonder what you think of WISR (WZR) as they have received a fair bit of media attention and commentator optimism. Before we get into it – a Short Bio on Wisr: Wisr is an Australian marketplace lender offering peer to peer lending services. It is known for being the first company of its type to be publicly listed in Australia – before 2018 - changed names from DirectMoney under a rebrand to Wisr But back in 2015 listed on the ASX through a reverse takeover of Basper Ltd, raising $AU11.2m at 20c per share Claims to be Australia’s first ‘neo lender’ offering cheaper loan rates (depending on credit history) than the big four banks. Issues small loans only between $5k and $50k then on sells them. The primary activity is writing personal loans for 3, 5 and 7 yea

Welcome to Finance and Fury What a week last week was for markets – ASX lost value of just under 10% - All around news of the Coronavirus and speculation on Government responses – So Aus and international markets have dropped heavily – might be thinking that it is solely out of expectation that companies will lose money from the Virus outbreak. Well – the overall Market has tanked which companies most affected? - almost every one Medical companies dropped, banks dropped, A2 Milk – which has large sales to china went up over the week In the US - FANG stocks went down heavily – Google, FB, Amazon – down 14% - understand Amazon if cant ship goods – but why FB? If anything – people may be spending more time inside online What does this all say? Could the Selloff probably have less to do with the coronavirus than what is being reported on? – let's have a look at this further to see – or if it is just speculative selling/profit-taking – and if it is a good time to buy? Before we get into it – Nobody has asked t

Welcome to Finance and Fury, The Furious Friday Edition With the current state of the markets – and the focus only on today's news and short-term cycles - In this episode – we will be looking at economies and markets in relation to Waves and cycles in a complex system – Like seasons in weather – markets have cycles – like weather though, predicting it is not the most accurate – To do this though we will have a look at what is known as a Kondratieff Wave - And do they still have applications to modern financial markets almost 100 years later  Understanding Kondratieff Waves A Kondratieff Wave is a long-term economic cycle believed to be born out of technological innovation - results in a long period of prosperity, then a lull, then a decline Theory was founded by Nikolai D. Kondratieff - a communist Russia-era economist who noticed agricultural commodity and copper prices experienced long-term cycles – focused on other economic cycles involved which have periods of evolution and self-correction. With every

Welcome to Finance and Fury, The Say What Wednesday Edition. Where we answer your questions. I'm Louis Strange and today's question comes from Mark. Hi Louis, I just heard about IBC (INFINITE BANKING CONCEPT) and I would like to know your input on it. They are saying you can be your own bank by setting up a cash flow whole life insurance policy. Then you are able to borrow against your liquidity, I would like to hear your thoughts on it.   Spoiler – this probably can’t work in Australia – run through what this is first and then go through reasons why   The concept isn't that new – History The first large-scale attempt to market this concept came about in 1980 – the concept of LEAP - The Lifetime Economic Acceleration Process – since then had IBC with Be Your Own Banker and then also Bank On Yourself more recently  But the concept dates back further than 1980 - roots of this strategy go back generations — at least prior to the American Civil War – how did it work in practice? Started with Farmers - struggled

Welcome to Finance and Fury Today – going to cover the Central banking playbook in the next crisis – If there is ever going to be one! Today – was doing some reading so will have a look at some comments from key central banking figures over the past few years – and look at the market implications – as either markets will crash at some point and central banks will conduct bail-ins and also buy up shares – or they will actively try to avoid a crash by a BOJ strategy – constantly buying shares and offering incentives (continued low-interest rates) for investors to continue investing To start with - Back in June 2017 - several key officials provided some bizarre honesty in their statements – all of this occurred from individuals under Janet Yellen's Federal reserve – Now the Fed Chair is Jerome Powell – appointed by Trump – but the playbook likely hasn’t changed – Let's have a look though at the statements from back in 2017 – rare to get anything from Fed officials for the market implications of their comments -

Welcome to Finance and Fury, The Furious Friday Edition This week – see what lessons can be learned from - Last week - Story of Financial alchemy in its early days with the SSC bubble Been many bubbles since then – The Markets have a Cycle to them History of the last 90 years – exclude wars and a few other drops that weren’t the result of a bubble bursting – you have 1929 crash (-46%), credit squeeze of 1961 (-23%), OPEC stagflation of 1970s (-59%), 1987 crash (-50%) and the 1990 recession that followed (-32%), tech bubble in 2000s (-22%), GFC of 2008/9 (-55%) - Good news - Markets do recover – we are back to all-time highs for the index - but keep repeating the same cycles – debt being flooded into markets – leverage grows, investment prices rise and seeing the artificial price rises, people jump in to not miss the boat – no pun intended – especially as we will be looking at the SSC bubble last week in relation to these common factors over time But like any cycle – what goes up must come down – and there

Welcome to Finance and Fury, The Say What Wednesday Edition - Where every week we answer your questions Today's question is from James Hi Louis, Just a question regarding owning your home. Me and my partner would like to eventually own our own home but we are worried about such a large sum of our overall wealth going into a single asset - our future house. How would you correctly diversify your assets in this scenario, were there any strategies to doing this? Especially with house prices at the moment, it really seems like all your eggs will be in one basket - and for a while. What I’ve seemed to gather is that owning your own house is more a lifestyle asset and a liability. All I seem to hear is nothing but expenses / fees / costs, a low amount of capital growth all for a relatively high amount of risk. Was this true? Thanks James – and Awesome points   In this episode – we will tackle this using the economic problem and opportunity costs – The economic problem – that we all have limited resources of saving

Welcome to Finance and Fury 2020 has seen a very noisy start to the year – But what’s new? The media is constantly reporting on one major event after the other – fear sells better than nice stories – The more fearful the event – the more traffic that is driven on clicks – the more clicks the more revenue from advertising – always remember that – their only incentive is to make money first – and reporting on the stories that will make the most money comes before informing you The greater the human or investment market implications a story implies – the more fear comes with it And it is constant – 24 hours per day, every day each week – never a break from bad or fearful news Today – want to talk about strategies to sift through what is money-making clickbait – especially when it comes to investments – and how to First – look at the news cycle for Australia in 2020 so far – Started with bushfires, moved on to WW3 with US/Iran tensions, now the coronavirus outbreak is creating fears of a global pandemic –

Welcome to Finance and Fury, The Furious Friday Edition Today - Lesson from the past – Story of Financial alchemy in its early days Specifically – turning debt into equity – i.e. financial alchemy Story Starts - In 1700s the English Crown had amassed massive debts – all from fighting wars with the French and Spanish, also a massive civil war – along with colonialist intentions – When in August 1710 Robert Harley was appointed Chancellor of the Exchequer Position - senior official within the Government of the United Kingdom and head of Her Majesty's Treasury When he took over – got a bit of a shock - £5,000 in assets - £9,000,000 in debt – to give an idea of this size – that debt is still being paid down – last announcement in 2015 Politically – things were also a mess - At the time – two parties – Tory’s and the Wigs – very bipartisan who couldn’t get anything done – raising taxes to pay this was out – so turned to the Bank of England The government had already become reliant on the Bank of England – bac